CANADA STOCKS-TSX rises on hope for 'fiscal cliff' deal

* TSX closes up 117.41 points, or 0.95 percent, at 12,433.53
* Materials sector leads gains amid U.S. budget uncertainty
* Canpotex deal boosts potash companies
By Allison Martell
TORONTO, Dec 31 (Reuters) - Canada's main stock index ended
the year up nearly 1 percent on Monday, boosted by the materials
sector, as U.S. lawmakers neared a last-minute agreement to
avoid the "fiscal cliff" that could push the U.S. economy into
recession.
Gold rallied in the afternoon after news of a potential deal
and held gains as President Barack Obama said a deal to prevent
the tax hikes and sharp spending cuts was in sight, but not yet
complete.
"As always, they leave it to the very last moment, and then
something almost invariably emerges, even if it's not the major,
game-changing plan that they wanted," said Gavin Graham,
president at Graham Investment Strategy.
Graham said investors were likely buying gold because of
inflation that could follow a resolution of the U.S. budget
dispute. Gold is seen as a hedge against inflation.
Upbeat manufacturing data out of China also helped the
Canadian market. "It's evident now that China is emerging from
its slowdown," Graham said.
The Chinese data boosted iron ore and copper prices. Teck
Resources Ltd, Canada's largest diversified miner, was
an influential gainer on the TSX, rising 3.1 percent to C$36.15.
The Toronto Stock Exchange's S&P/TSX composite index
closed up 117.41 points, or 1.0 percent, at 12,433.53.
The index finished 2012 up 4.0 percent, lagging gains in the
United States and most major European markets.
"If you're a Canadian and you bought the index, you got
killed by the commodities this year," said David Baskin,
president of Baskin Financial Services. "You got whacked by the
gold stocks."
Gold miners underperformed in 2012 as soaring operating and
development costs cut into profits despite historically high
gold prices.
Barrick Gold Corp was the most influential gainer
on the index on Monday, however, rising 2.8 percent to C$34.82.
Goldcorp Inc was 3.2 percent higher, at C$36.57.
The heavyweight materials sector closed up 2.6 percent
overall.
Financial stocks, which have been rising and falling with
the perceived chances of a U.S. budget deal in recent weeks,
closed up 0.3 percent after a day of choppy trading.
Energy stocks rose 1.1 percent as oil prices edged higher on
optimism about the U.S. budget talks. Suncor Energy Inc
rose 1.5 percent to C$32.71.
Canpotex Ltd, the offshore sales agency for Potash Corp of
Saskatchewan, Mosaic Co and Agrium Inc
, said it struck a six-month agreement to supply a
subsidiary of China's Sinofert Holdings Ltd. Potash
Corp rose 1.9 percent to C$40.48, and Agrium was up 1.4 percent
at C$99.14.
The Canadian Imperial Bank of Commerce said it would
pay $149.5 million to the estate of Lehman Brothers Holdings Inc
to resolve litigation over a collateralized debt tied to the
bankruptcy of the former Wall Street bank. Canadian Imperial
shares closed down 0.7 percent at C$79.97, and CIBC was the most
influential decliner in the index.